Amazon Go & RFID – The Automation Dilemma

Sam Sattel

EDA

The Automation Dilemma – Did Amazon and RFID Just Kill the Retail Employee?

Three’s A Crowd!

Let’s see a show of hands – Who loves the self-checkout lines at the grocery store? Yeah, they don’t work all the time, and still require some human intervention. But the benefit of being able to scan your stuff, bag it up just the way you like, and walk out the door without having to deal with a cashier or those long lines is priceless.

Amazon looks to be showing us the way towards an even more automated grocery store experience in the future with their new Amazon Go concept. But did the ecommerce giant and their technology just kill the retail employee and a method of doing business that has largely been the same since the 1800s? It’s the automation dilemma.

Just Walk Out – Is It That easy?

Amazon Go’s tagline is pretty compelling – “Just Walk Out.” This new retail concept is Amazon’s first foray into the world of brick-and-mortar business, and it seems to be making some waves. What’s the big deal? Think about a grocery store without all of the problems, like waiting in line, waiting to have your items scanned one-by-one, comments about each item you are purchasing, waiting again to have your stuff bagged up, then not having your credit card work, and finally trying to make your credit card work with a plastic bag (sound familiar)? Man, that sounds really inefficient.

Now, imagine all of these problems disappearing, leaving you only the essence of the grocery store experience – getting what you need, and getting out. In an Amazon Go store, you simply grab the stuff you want to purchase, put it in your bag, and walk out. On your exit, all the stuff in your bag will automatically be deducted from your Amazon account. Does all of this sound too good to be true? Here it is in action:

While Amazon Go is only open to Amazon employees in a beta program until early 2017, it’s set to completely shift how retail works in the future, thanks in part to technologies like artificial intelligence, RFID, sensors, and machine learning algorithms. And while we do find it rather odd how hush-hush Amazon is about how the whole operation works, we do know one thing – RFID is going to be huge.

Moving Beyond the Barcode

RFID, or Radio-Frequency Identification, was created back in 1948 by scientist and inventor Harry Stockman and was used primarily for military applications. Today, RFID is just about everywhere. Here are a few of the most popular uses that you may or may not know about:

Toll Road & Subway Passes – Each swipe of your toll road or subway pass is made possible with RFID. And to avoid dealing with freeway traffic nightmares, you can thank RFID for your ability to cruise freely on the express lane without needing to stop at a toll booth.

Casino Chips – How about all of those chips you’ve lost (or gained) at your recent casino trip? Each chip these days has a RFID microchip built in that helps to prevent fraud and theft. We’d guess that these are even tied to a customer’s account when they get redeemed for cash to keep a digital trail.

Lost and Found – Ever lose your cat or dog out in the wild? My parents’ dog came from an animal shelter and has one of those RFID microchips buried somewhere underneath his skin. If he ever gets loose again, a quick scan of his RFID tag will bring him back home.

These are just a few of the most common uses for RFID, but these microchips are used in so many other applications it’s almost mind-boggling. Ever check in your baggage at an airport? That’s all handled with RFID. Or those packages that get delivered to your doorstep in two days? Yep, RFID. And one we didn’t quite know about – agriculture uses RFID tags on a cow’s ear to track all of their livestock.

Who ever knew, even cows have their own data management system and RFIDs! (Image source)

As we get deeper into our digital world, nearly everything will start to connect and transmit data using RFID or some other form of communication. The numbers don’t lie – RFID is projected to grow at 22.4% through 2018, and the smart label market is expected to be valued at $10 billion by 2020.

The Inner Workings of RFID

RFID works on a simple premise, using radio waves and microchips that can both read and capture information. To get all the information you need from a RFID, they use what’s called a tag, which can send and receive information from RFID readers with the help of an antenna as shown below:

A complete RFID system, including a tag, antenna, reader, and computer. (Image source)

These RFID tags consist of both a processor that can store and interpret the information, along with an antenna that allows the IC to communicate with its home base. There are two types of RFID tags to know about:

Passive Tags – A passive tag will use the energy from a RFID reader to send information back and forth; otherwise, the tag lays dormant and doesn’t transmit data.

Battery Tags – As the name suggests, some RFIDs are embedded with batteries, allowing them to send and receive information without needing to be activated by a RFID reader.

These RFID tags also have several class designations that define their capabilities. You’ll find what’s called RFID Class-1, Generation-2 being used in retail operations today. The Class part refers to the functionality of the tag, and the Generation refers to the physical and logical standards of the software. Here’s a quick breakdown of all the classes you’ll need to know about if you find yourself working with RFIDs in the future:

RFID Has Its Share of Pros and Cons

From a public perception, RFID has a ton of privacy concerns. Ever heard of Spy Chips? This is another name for RFIDs, and the conspiracy goes that corporations and governments will use this technology to plan and track your every move. Whether or not this is true, you can’t deny that there is an inevitable loss of privacy and control when it comes to using RFID, seeing as how they can be read without needing to be swiped or directly scanned, and are invisible now.

A complete RFID with antenna and microchip, the size of a grain of rice.

There are also some technical problems to address. Since RFID uses electromagnetic waves like WiFI and cellphones, it’s easy to jam when using the right frequency. This could be a huge nightmare if an entire RFID system gets jammed in a retail situation like Amazon Go, and can even be downright life threatening if the same situation happens in a hospital or military field operation.

RFID readers are also prone to collision issues when signals from two or more readers happen to overlap. But more and more systems are starting to use anti-collision protocols, which allows tags to take turns when sending information to a single reader.

Despite all of these problems that RFID has to overcome it also has many benefits and is a vast improvement over the barcode. Here’s why:

It’s more agile than the barcode. Information on a RFID microchip can constantly be updated, unlike the barcode where information is fixed.

It’s more efficient than the barcode.RFID tags can be scanned all at once, rather than one-by-one. This is already in widespread use to make the massive logistics at Amazon happen, and we’re excited to see what it can do in a retail setting.

It’s more intelligent than the barcode. RFID can help businesses large and small gain greater insights into how their customers shop, and the goods in their shopping bag. The more data retailers have available, the more they can personalize the shopping experience.

So Is This the End of Retail Employees as We Know It?

The question on everyone’s mind – is Amazon Go and RFID going to automate away the need for having retail employees? This is a big problem for our economy. The more we automate, the fewer jobs we create. Is the solution to keep pushing forward with advancements in automation at the expense of our jobs, or is there a middle ground out there somewhere? We’re all a little bit nervous, and excited to see what will happen. Here are our predictions for the future:

The employees won’t disappear.

Rather than killing off the retail employee, we will see stores like Amazon Go reprioritizing how employees are used. Maybe instead of having to check out customers, employees can focus on replenishing stock or assisting customers with product knowledge. So yeah, there might be fewer employees needed to operate a store, but that’s just efficiency at its finest.

Data will win big, but are you okay with that?

This new retail experience is a huge goldmine of data for Amazon and any other company that capitalizes on the opportunity. Amazon Go has a RFID system linked to your Amazon account and sensors in the store that show exactly what you’re looking at and what items you put in your bag, or even put down. Your entire shopping experience is monitored, and Amazon will know exactly what products you buy and how. Is this too much?

RFIDs will soon become invincible.

We’re already starting to see RFIDs the size of a grain of rice integrate into an ecosystem with other sensors and communication devices. And then some RFIDs can sense temperature, moisture, pressure and vibration. So what’s next? Heartbeat monitors, blood pressure sensors? There’s even talk about RFID “dust” that can be inhaled into the body and act as an internal monitoring system.

Cloud-based capabilities will move things forward.

In the past, it was a bit of a pain to manage the influx of data flowing in from thousands of RFID tags with a self-managed system. But with cloud-based services now universally available, we’ll start to see the deployment of centrally managed solutions for retail, healthcare, and manufacturing sectors that would have otherwise been a nightmare to monitor and maintain.

Privacy will continue to be a heated issue.

We’ve already seen RFIDs getting a bad rap in the past as some kind of crowd control device by governments and corporations. Will we see the government start to get involved in how RFIDs can be used and regulated in various industries? It’s already happening with drones, so it’s only a matter of time.

Come On Amazon; We’re Counting On You

If there is one thing that Amazon Go can manage to do those other retailers haven’t quite figured out, it’s able to link individual products to individual consumers through their smartphones. Doing this error-free is no easy task, but if there’s one company that can do it, it will probably be Amazon. Until Amazon Go arrives in early 2017, we’ll be keeping our eyes glued to see what kind of magic can be done with RFID and machine learning. And before you go thinking that Amazon is a genius for their new retail concept, you better watch this IBM video. We think someone owes IBM a big thank you.